New Zealand Follows Australia on Tobacco Plain Packs

A proposed cigarette packet, to be introduced under Australia's cigarette plain-packaging law, is arranged for a photograph in Melbourne. In Australia people buying cigarettes since Dec. 1 face warnings that include photos of a gangrenous limb and a cancer victim. Photographer: Carla Gottgens/Bloomberg

Feb. 19 (Bloomberg) -- New Zealand is set to become the
first country after Australia to pass a law requiring that
cigarettes be sold in plain packages.

New Zealand’s government will bring in the legislation to
cut the appeal of smoking, although it will delay implementation
until legal disputes faced by Australia are resolved, Associate
Minister of Health Tariana Turia said in a statement today.

“We cannot continue to allow tobacco companies to use
sophisticated packaging designs to promote their products,”
Turia said. “There is a risk that tobacco companies will try
and mount legal challenges against any legislation, as we have
seen in Australia.”

In Australia, cigarette packages since Dec. 1 include
warnings that include photos of a gangrenous limb and a cancer
victim. All cigarettes in Australia must be sold in the uniform
packs, with the brand name relegated to the bottom quarter of
the package on a drab brown background. The law is being
challenged at the World Trade Organization and at arbitration.

“This is a major step,” Skye Kimura, Tobacco Control
Adviser for the Cancer Society of New Zealand said of the
government’s proposal. “This is another milestone in the
journey to New Zealand being smoke-free by 2025.”

Ignores Consultations

The government announcement ignores the result of a public
consultation process that ended Oct. 5, The New Zealand
Association of Convenience Stores said in a statement.

“Of the 20,000 people that took the time to submit their
views, over 11,800 opposed the idea,” Roger Bull, chairman of
the association, said in the statement. “By ignoring them, the
government is sending a clear message to them that they don’t
care about more costs being forced onto the retail sector.”

British American Tobacco Plc’s New Zealand unit said it
remains opposed to the introduction of plain packaging in the
country.

“While we can’t rule out legal action at this stage, we
can say that we will fully participate in the legislative
process,” Steve Rush, general manager at BAT’s unit, said in an
e-mailed statement.

Tobacco Backlash

Cigarettes kill 5,000 New Zealanders each year, Turia said.
She said the consultation process confirmed plain packaging will
be effective in removing the impression that tobacco may be less
harmful than it is.

The law works in Australia, Fiona Sharkie, executive
director at Quit Victoria, said in an e-mailed statement. After
the introduction of plain packs, the number of calls to the
group’s Quitline spiked with the number of callers sourcing the
number from cigarette packages rising to 36 percent from 23
percent, she said.

British American Tobacco, maker of Dunhill, Pall Mall and
Australia’s best-selling cigarette brand, Winfield,
unsuccessfully sued to block the Australian law, because the
country didn’t get any benefit from the removal of trademarks,
according to the High Court of Australia.

‘Breaches Rules’

Philip Morris International Inc. is also pursuing the case
in international arbitration. The Australian proposal violates a
treaty with Hong Kong and may cause billions of dollars in
damages, the maker of Marlboro cigarettes said.

“There is no credible evidence that plain packaging will
lower smoking rates, but strong evidence it breaches
international trade rules,” Philip Morris said in an e-mailed
statement today.

The World Trade Organization has agreed to hear a complaint
from tobacco producing nations led by Ukraine that Australia’s
law breaches international trade agreements and constitutes an
unjustifiable encumbrance on the use of trademarks. The WTO
hasn’t set a date for a hearing.